PREVENTION FOR A HEALTHIER AMERICA: Investments in Disease Prevention Yield Significant Savings, Stronger Communities

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1 PREVENTION FOR A HEALTHIER AMERICA: Investments in Disease Prevention Yield Significant Savings, Stronger Communities Jeffrey Levi, PhD Executive Director, Trust for America s Health Barbara A. Ormond, PhD Senior Research Associate, Urban Institute July 17, 2008

2 Healthier America Project Current U.S. Health Care Costs: More Than $2 Trillion Annually More Than Any Other Nation in the World

3 Healthier America Project More than 140 organizations have signed onto A Vision for a Healthier America 1. We believe prevention must drive our nation s health strategy. 2. We believe Americans deserve healthy and safe places to live, work, and play. 3. We believe every community should be prepared to meet the threats of infectious disease, terrorism, and natural disasters. 4. We believe Americans deserve to know what government is doing to keep them healthy and safe.

4 Prevention for a Healthier America: Return on Investment? Top Factors That Impact U.S. Health: Physical Activity Nutrition Smoking & Other Tobacco Use Current Status: 2 out of 3 adults American are overweight or obese 1 out of 5 adult Americans do no physical activity 1 out of 5 adult Americans smoke

5 Prevention for a Healthier America

6 Prevention for a Healthier America: Financial Return on Investment? With a Strategic Investment in Proven Community-Based Prevention Programs to Increase Physical Activity and Good Nutrition and Prevent Smoking and Other Tobacco Use INVESTMENT: $10 per person per year HEATH CARE COST NET SAVINGS: RETURN ON INVESTMENT (ROI): $16 Billion annually within 5 years $5.60 for every $1

7 Prevention for a Healthier America: Return on Investment? POTENTIAL SAVINGS BY PAYER WITHIN 5 YEARS Distribution of Savings MEDICARE: MEDICAID: PRIVATE PAYERS: More than $5 Billion annually within 5 years More than $1.9 Billion annually within 5 years More than $9 Billion annually within 5 years

8 Health Payoff: Potential Reduction in Disease Rates Type 2 Diabetes & High Blood Pressure Heart Disease Kidney Disease & Stroke Some Cancers Some Respiratory Disease & Arthritis 5% with in 1-2 years 5% within 5 years 2.5% within years

9 Prevention for a Healthier America: Study Design Based on extensive literature review by The New York Academy of Medicine of evidence-based community disease prevention programs & Economic model by the Urban Institute Key Assumptions: Impact of programs on increasing activity & good nutrition, preventing smoking & other tobacco use Behavior change impact on reducing which types of diseases & by how much Costs of treating these diseases Costs of these programs

10 What is Community-Level Prevention? Interventions that promote healthy environments and behaviors making it easier for people to make healthy choices, such as: Changing community norms and growing community empowerment Coalition and social network building Social marketing campaigns Changing the physical and social environments Organization practices and governmental policies Facilities and programs Walkability lighting, sidewalks, signs Increasing individual knowledge and skills Health education programs

11 Focus of the Model Diseases Interventions Expensive Type of intervention Chronic Amenable to community-based prevention Effect on disease Associated costs

12 Most Expensive Conditions Heart disease Cancer Trauma Mental disorders Pulmonary conditions Diabetes Hypertension Cerebrovascular disease Arthritis Pneumonia Kidney disease Endocrine disorders Skin disorders Back problems Infectious diseases

13 Priority Conditions Heart disease Cancer (selected) Trauma Mental disorders Pulmonary conditions (selected) Diabetes Hypertension Cerebrovascular disease Arthritis Pneumonia Kidney disease Endocrine disorders Skin disorders Back problems Infectious diseases

14 Data Analysis Data Medical Expenditures Panel Survey (MEPS), pooled (adults only, excludes nursing home care) Methods Regression analysis to predict expenditures by disease cluster by disease trajectory by payer

15 Disease Clusters-Intervention Pathways: Short Run Medium Run Long Run Physical activity, obesity, nutrition, smoking cessation diabetes diabetes & HBP HBP heart disease stroke renal disease heart disease stroke renal disease cancer arthritis COPD

16 Annual Change in Expenditures (5% effect, 2004 ) Total Dollars Includes Intervention Costs Payer Short Medium Long All U.S. $5.7 Billion $19.5 Billion $21.4 Billion Short Run: 1 to 2 Yrs. Medium Run: 5 Yrs. Long Run: 10 to 20 Yrs.

17 Prevention for a Healthier America: Return on Investment? POTENTIAL SAVINGS BY PAYER WITHIN 5 YEARS Distribution of Savings MEDICARE: MEDICAID: PRIVATE PAYERS: More than $5 Billion annually within 5 years More than $1.9 Billion annually within 5 years More than $9 Billion annually within 5 years

18 Prevention for a Healthier America Additional National Findings: Potential State Savings, Top 3 States -- Annually within 5 years: $2.8 billion annually within 1-2 years ROI of nearly $2 for every $1 $18.4 billion annually within years ROI of $6.20 for every $1 California -- $1.7 billion New York -- $1.3 billion Texas -- $1 billion Potential State Savings, Lowest 3 States -- Annually within 5 years: Vermont -- $43 million North Dakota -- $39 million Wyoming -- $29 million

19 Prevention for a Healthier America: Study Design The findings are CONSERVATIVE ESTIMATES Low-end assumptions for impact on diseases High-end assumptions for costs of programs One-time reduction in rates of each disease Did not include: Worker productivity Reduced absenteeism Enhanced quality of life Nursing home spending on these conditions

20 Prevention for a Healthier America: Examples of Programs Healthy Eating, Active Communities -- funded by The California Endowment $7 per person cost: new parks, city planning, marketing health foods in local stores, school programs Cigarette Taxes: Proposition 99 in California Cost is revenue generating: Reduction in adults smoking from 26.7% in 1988 to 22.2% in 1992.

21 Additional Information Full report available: Contact Rich Hamburg, Director of Government Relations, with questions: